A Bengali rate of growth

Despite its slackening industry, the common perception of West Bengal as a backward state has little substance when one looks at the facts

Mohan Guruswamy Delhi

Most of us are conditioned to view economic development in terms of industrialisation. While industrialisation is essential for economic transformation, it is not as if economic growth is not possible without it. The sectoral structure of India's gross domestic product (GDP) and its slow transformation makes a good case study. The share of industry in India's GDP has hardly moved, even when the economy was growing at almost twice the "Hindu rate of growth" as was the case in most of the last two decades.

At a regional level, we can see this taking place in West Bengal. Despite its obviously slackening pace of industrialisation, in the post reforms period West Bengal has racked up the fastest rate of economic growth in India, both in terms of GDP as well as per capita income. Now juxtapose this fact, evidenced by official statistics put out by the Government of India against the huge investments in industry taking place in states such as Maharashtra, Gujarat and Tamil Nadu, and we are left with a startling picture of a state whose onetime industrial primacy many think is now a fading memory actually ahead of the big industrialising states. But since we cannot grasp what we cannot see — after all new factories and five star hotels are the only visible proof of development most of us accept — people castigate the Communist Party of India (Marxist) led government for what it has done to West Bengal. This is only perception and not reality.

The facts are that after 1993-94 West Bengal has the highest growth rate of 8.55 per cent with second placed Karnataka's 7.29 per cent well behind it. It would also seem that the Marxist rate of growth has been better than the Hindu rate of growth since India only grew at 6.87 per cent during this period. 

Even in terms of growth of per capita income, West Bengal has fared much better than all other states during the post-reforms era. It achieved an average growth of 5.5 per cent after 1993-94 as opposed to the nationwide growth of 4.3 per cent. This is even more revealing considering that during this period West Bengal was also racking up an average annual population growth of 1.78 per cent between 1991 and 2001, which is much higher than the rate of the high achievers like Tamil Nadu (1.11 per cent). If one were to consider the population growth since 1981, West Bengal grew at 2.34 per cent, which is uncomfortably close to the national average of 2.51 per cent. Undoubtedly, the seemingly uncontrollable and unabated migration from Bangladesh has contributed to this relatively high growth of population. Whatever the reasons for this, we can only surmise that the rise in par capita incomes would have been even higher if there was no influx from neighbouring countries like Nepal and Bangladesh, and even neighbouring states like Bihar and Orissa.

Even more interesting is the fact that the per capita incomes of West Bengal and Maharashtra, after excluding the two great metros of Mumbai and Kolkata, are fairly close. West Bengal's per capita income, after excluding Kolkata, is Rs 12,671 while Maharashtra's without Mumbai is Rs 13, 897. Thus, even if we accept for a moment that West Bengal has a Marxist system, its performance is not too bad compared to what then must be the most laissez-faire of our states — Maharashtra. We can be certain that if the per capita incomes of other two big cities of Maharashtra — Pune and Nagpur — are excluded, its per capita income will be below that of West Bengal.